by ANIS HAZIM / pic by TMR FILE
AIRASIA Bhd’s long-haul sister company AirAsia X Bhd (AAX) should not treat its customers who have paid and yet to receive the refunds or services as creditors, says former Malaysian Aviation Commission (Mavcom) chairman Dr Nungsari Ahmad Radhi (picture).
All forward sales cannot be dishonoured this way, not only for aviation, but also for other form of businesses, he said.
“Creditors took the risk to finance or give loans to AAX, but it sold tickets in advance to passengers and did not deliver the promised service. It is ridiculous and a bad precedent if this is allowed,” Nungsari told The Malaysian Reserve (TMR).
“I know that’s their proposal to their creditors, which is half sen for every RM1, but passengers are customers, not creditors,” he added.
He also said that AAX should not rank passengers pari passu with other creditors.
“This is what they are proposing and should not be the case, especially for airlines where tickets are sold, as in AAX case, months in advance. So, not only have they enjoyed the time value of money, but now rank customers who have done that are equal to creditors,” he added.
Nungsari also questioned Mavcom’s position in this issue, saying that as a regulator it should ensure the consumer, or in this case, passengers’ rights is protected.
Meanwhile, Malaysian Association of Tour and Travel Agents (Matta) president Datuk Tan Kok Liang said a fairer compensation scheme is much needed compared to the 0.5% proposed debt settlement by AAX.
“Under the proposed scheme, which is now under the supervision of the High Court, travel agents, charter agents and passengers will receive RM3 million out of the RM599.8 million outstanding accrued liabilities,” Tan said in a statement yesterday.
AAX’s proposed debt restructuring requires the approval of at least 75% of the total debt value that votes in each class of creditors.
The carrier will likely go into liquidation if it fails to get creditors’ approval for its business restructuring.
Under its debt restructuring plan, AAX aims to reconstitute RM63.5 billion of its debt into an acknowledgement of indebtedness for a principal amount of up to RM200 million.
“This will be done by shaving off 99.9% of its issued share capital as well as a proposed share consolidation of every 10 existing shares in AAX into one share,” he explained.
He also argued that the passengers and travel agents should not be penalised as in the first place, these deposits should be held in trust by the airline.
“As such, we urge a better compromise which includes a full debt settlement rate or converting all outstanding liabilities into future credit points,” he pressed.
He noted that the court convened a meeting for the Class A, B and C creditors to participate, speak and vote is tentatively scheduled on Nov 12, 2021.
As of March 12 last year, Matta had urged the Ministry of Tourism, Arts and Culture to have the Fourth Schedule of the Tourism Act 1992 amended or revoked.
“The schedule in its current form does not take into account the changing landscape of the tourism economy and puts both travel agents and operators as well as their customers in a difficult position,” he said.
On April 14, 2020, Matta had also called on Mavcom to provide a mechanism for the protection of consumers, including travel agents through adequate supervision and governance.
“It is also for the Consumer Tribunal of Malaysia to note and be aware of the situation and the circumstances that the travel agents are facing due to this situation,” he further said.
He added that the travel agents have always been at the receiving end, although they are not the principal in this case.